2i Capital has sold three-fourths of its 6% stake in Pipavav Shipyard in the open market since the company came up with its maiden public issue last September.
As per its latest disclosures, the private equity fund has sold 2.7% of Pipavav over the last three weeks and is estimated to have pocketed around Rs 100 crore in the process.
Earlier, it had sold around 2% stake between October 2009 and mid-January 2010, encashing around Rs 70-77 crore. 2i’s remaining 1.16% in Pipavav is valued at Rs 41 crore.
Most of the share sale is estimated to have made at an average of Rs 55 apiece against the cost of acquisition for 2i Capital pegged at Rs 25 a piece. As a result, the partial exit translates into 120% net return on the three-year-old investment.
2i Capital had invested a total of Rs 100 crore in two tranches through convertible bonds in September 2006 (Rs 84 crore) and February 2007 (Rs 16 crore). The bonds were converted into 40 million shares in October 2007 which gave it 6.89% equity stake (pre-IPO).
The issue, which raised Rs 478 crore ($100 million) last September, brought down 2i Capital’s holding to 6.01%.
Pipavav Shipyard has been one of the many new public issues where the stock price didn’t manage to hold on to the issue price. Although it hit an intra-day high of Rs 64 on its debut on October 9, 2009, the stock has been mostly trading below the issue price of Rs 58 ever since.
Promoted by SKIL Infrastructure Ltd and Punj Lloyd Ltd, Pipavav had a large group of institutional investors before it got listed including some PE firms. Other investors in Pipavav include Blackstone (portfolio investment arm), Merrill Lynch, Galleon, New York Life, Trinity and The India Fund among others.